Don’t privatize the Postal Service
Attempts to undermine and then privatize the United States Postal Service are once again making headlines.
This time it is in the guise of refusing to consider needed federal support to assure the postal service remains solvent through the COVID-19 crisis and its aftermath. Postal support was removed from the first rounds of stimulus packages and legislators have been warned it is a poison pill that will likely cause any new stimulus deals to be dead on arrival.
At issue is that the Postal Service doesn’t turn a profit, at least not in the same sense as businesses like Walmart or UPS might.
According to the Washington-based Institute for Policy Studies (IPS), the postal crisis has its roots in politics rather than business model or economic conditions.
According to an IPS report, “in 2006, Congress passed a law that imposed extraordinary costs on the U.S. Postal Service. The Postal Accountability and Enhancement Act (PAEA) required the USPS to create a $72 billion fund to pay for the cost of its post-retirement health care costs 75 years into the future. This burden applies to no other federal agency or private corporation.
If the costs of this retiree health care mandate were removed from the USPS financial statements, the Post Office would have reported operating profits in each of the last six years. This extraordinary mandate created a financial “crisis” that has been used to justify harmful service cuts and even calls for postal privatization.
The problem with privatization is that the Postal Service is the only entity that has the ability, and mandate, to reach everyone where they live. Companies such as UPS, FedEx and others can pick and choose where and how they deliver their service to maximize their profitability.
The Postal Service is one of the great equalizers in the country when it comes to the urban and rural divide. People and businesses in rural areas will suffer under any privatization scheme paying increased costs for decreased services. One only needs to look to the telecommunications industry to see this in action, where rural areas pay a premium for largely inferior service options compared to their more urban peers.
During the COVID-19 pandemic, postal workers have been on the proverbial front lines, delivering mail, packages and keeping people connected throughout the country. This essential task gained heightened importance leading up to the April 7 election as many people took the opportunity to cast absentee ballots rather than risking coming to polling places during a pandemic. With mailed ballots likely to play an increased role in both the upcoming 7th Congressional District special election next month and next fall’s presidential election, putting the security of the election process in the hands of an untested private entity would be disastrous for American democracy.
Just as Congress created the artificial crisis with the Postal Service, Congress must clean up its mess beginning with repealing the PAEA and instead having the Postal Service follow the same Generally Accepted Accounting Practices (GAAP) standards as other businesses and government entities when it comes to accruing for post-retirement expenses. This will free up existing reserves for the Postal Service to be able to handle the impacts of the COVID-19 pandemic and future challenges.